Growth Rate: What do we mean by the Growth Rate and how do countries differ in establishing a growth rate? Let me give you an uneducated fisherman's viewpoint, not that of an economist.
You take the value of your assets, cash in fiscal reserves in foreign exchange at the beginning of the year and at the end of the year on December 31st, you subtract the beginning of the year fiscal reserves in foreign exchange (SAVINGS) from what you have at the end of the year. You then take this number of (hopefully increased savings) and divide it by the number of fiscal reserves you had at the beginning of the year. This will give you a percentage that is the Growth Rate.
Are all countries the same? No, they are not! Third World countries are called third world, because they are basically agricultural and primary mineral producing countries. Saudi Arabia sits on a lake of oil, so it is like a gold mine, or money in the bank. It can alter it's growth rate by pumping and selling more oil, or reducing the oil sales. Developed countries, or industrialized countries are different again, because they manufacture things and export them to all the other countries of the world. So the USA for instance has a Growth Rate based solely on technical changes and production, which is turned into manufactured goods, that they export. New technical products make up the bulk of what keeps the USA Growth Rate the foremost in the world. Last year their growth rate was 7.9% based almost exclusively on domination in technological research, manufacturing new product exports.
How is Belize for a growth rate? Well Belize realizes growth from exporting agricultural products and from incoming tourism services. Basically, you measure the amount of foreign exchange you can earn and save! It is the saving part that confuses many politicians in many third world countries, including Belize. If you don't save the foreign exchange it does you no good. Your ability to set aside foreign reserves is what tell bankers your growth rate.
Most countries have a fixed size of government and fixed expenditures. It is diddling with what you can afford to pay for and the number of people you can employ, or the inefficiency of government that eats up the incoming foreign exchange. Obviously, if you cut government costs, either by computerization, or new software programs that eliminate employing people, or restructuring the political structure in Belize through a federated system at lower cost, you will in turn increase your savings, or fiscal reserves in foreign exchange.
In a lot of third world countries, it is mostly government employment, and political pork barrel programs that eat up the incoming foreign exchange. In Belize, the biggest cross that the government has to bear, are the Creole population of Belize City, just one town of the nation. Many are in service and merchandising industries and give a value added service. Most however, are in the government salary type situation. It is the carrying of townie government salaried workers that kill the ability to save for the country. Which is why we have budgets supposedly; though in Belize there are no department budgets in the public realm noticeable these days.
The Belize government takes in about $280 million on average a year. That is Belize dollars. A lot of this is in foreign exchange. Figuring out how to cover the cost of government and pay off loans and interest and still save something is how you figure growth rates. There is a lot of room to maneuver here and almost anything can screw up the idea of having growth. Imaginative, innovative ways of governing, restructing departments and keeping government employees downsizing is the name of the game, with a relatively stable annual income.
A way of increasing growth, is the idea of investing in new industries. For the more you export, or earn some way in foreign exchange, for a fixed government budgeted operating cost, the more you can save in those foreign reserves in foreign exchange and improve your growth rate. Unlike manufacturing export countries like Japan, Germany, France, Canada, U.K., or the USA, Belize is a third world country, we are limited by what we can create to export to earn foreign exchange.
For example, let us consider the USA. With a growth rate last year of 7.9% mostly in technically innovations and products, the USA is doing very well indeed. But it takes heavy investment in 15,000 Universities, GRANTS for researchers in basic sciences and other things to bring new technologies to the forefront in a manufacturing climate to export to other countries of the world. We can look at nano-technology for instance. This is a new technology. Pretty soon in about ten years, you are going to have a sheet of paper made of computerized nano machines smaller than an atom. Those are the projections! You will talk to the paper and it will pull from memory whatever subject you want from it's encyclopedia and form the atoms in the paper to make the printing and pictures of the information you asked for. It is already in the labaratories. The President of the USA and his industrial advisors are earmarking specialized increased research GRANTS in the hundreds of millions, to bring these technologies along to the manufacturing stage. The estimated time is 10 to 15 years. So by investing in new technologies, the USA keeps it's growth rate going. There is bio-engineering, bio medicine, gene technology, computers that will be a million times faster and bigger in capacity than your current desktop, but will fit in a cube of sugar. It looks like the USA government investments in Universities and research grants are paying off.
This doesn't do much for Belize. We have neither the population, or resources to do this style of growth rate. What we can do however, is stay up with manufactured technologies and create businesses in the new technologies as they come on line from the USA and apply the skills to use those new hardwares. We would not be producers of the manufactured goods, but we can be operators and applications people providing world wide services using the new technological machines. That is one avenue. Aqua culture for instance, is another growth industry in Belize. We export the products, but all such industries are limited in size and expansion by geographic and ecological considerations. There is still room for tourism expansion, which is also growth. You can see that Belize has to provide some other basic services in order to achieve growth. This means investments by the government in infra-structure, such as roads, low cost electricity and telephones to all houses in the nation, elimination of income taxes, etc.!
Populations grow from the birth rate. More people are born than die! So with the growth of population any government in Belize has to keep moving to find new industries and providing improved infra-structural services, while at the same time reducing, or halting the growth of salaried government employees, or finding restructuring ways to employ more at lower costs ( seasonal, or part time). You cannot stand still in Belize, for the population growth will not let you. To keep your growth rate steady, you have to increase your foreign exchange earnings, while keeping down your expenses in government just to stay even with population growth. When the growth rate in Belize drops, most people migrate to other countries where there is more work. A self regulating mechanism.
Technically speaking the growth rate for Belize last year was 6.4%. This however seems a diddle performed by our Minister of Finance. According to independent economists hired by the Reporter Newspaper in Belize City, the government brought in packages of loans already approved in $50 million Bz blocks the last half of 1999. One of these was presumably given to Central Bank in the last quarter of the year, or in December and parked in the Fiscal Reserves, or something like that. So if we had $6 million Bz in Fiscal Reserves and then temporarily parked a $50 million Bz Taiwanese, or World Bank loan in the Fiscal Reserves, we got a bookkeeping figure on December 31st, of $28 million USA. This calculation gave us a bookkeeping figure of 6.4% growth rate for the turn of the year end accountanting. The announcements have been that we are going to have a 10% growth rate for this year. You can see how the bookkeeping diddle will be performed, because a foreign loan parked in Fiscal Reserves, or whatever account they are using to figure growth rate is not real growth. It is a lie and just fiction. The IMF were more polite, in their report. They simply stated that the Belize Government needs more reliable financial statistics, or words to that effect. But I bet they had a big chuckle in the upper echelon boardrooms of the IMF and World Bank in New York. Finance ministries in third world countries that are diddling the bookkeeping are old hat to them. You might fool your local population of voters and even lower level visiting economist clerks with such reports, but hardly fool the upper echelon excutive committees from outside. Along with this diddle, the alleged embezzlement by the PUP party of $3.34 million of poor peoples Social Security Funds for which the good PUP cabinet cannot produce an Options Certificate or any receipt, or tax record, or other proofs, just shows our current Ministry of Finance by the PUP is more twisted and crooked than a corkscrew.
Another scandal opened by Channel 5 news, was the South Silk Caye scandal. For about 20 years it has been the avowed policy of all political party's in Belmopan running the government, that no more Cayes will be sold off! None at all! They are to be preserved for future generations of Belizeans as our heritage. Public government announcements like this have been going on for a couple of decades. Lo and behold, Channel 5 News broke the PUP Cabinet scandal, that just before making the Silk Cayes a MARINE PRESERVE, one island was sold off to a local businessman, Immigration Economic Passport something or other favorite specialist, with inside connections to the PUP cabinet for the paltry sum of $2,560 Bz currency. If that gentleman wants an immediate 100% profit on his investment for the FREEHOLD title, I will gladly pay him double his money, or $5120 Bz currency right now, as fast as we can transfer title. Johnny Briceno, the Minister of Lands was caught with his pants down on this one. He made the lame excuse that hundreds of files come across his desk and if the preliminary work has been approved by other departments, he just signs off without checking anything. Yeah right! When the moon turns blue maybe!
June 14th., 2000 update on Silk Cayes. Government reverses the South Silk Caye sale and returns the money to buyer by Treasury Voucher!